ATAX 10-Q 0312



Item 1	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Partners’ Capital	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4	Controls and Procedures	47

This report (including, but not limited to, the information contained in “Management's Discussion and Analysis of Financial Condition and Results of Operations”) contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. When used, statements which are not historical in nature, including those containing words such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions, are intended to identify forward-looking statements. We have based forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. This report also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties and contained in this report and, accordingly, we cannot guarantee their accuracy or completeness.

Other risks, uncertainties and factors could cause our actual results to differ materially from those projected in any forward-looking statements we make. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under the headings “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and in item 1A of Part II of this document.



	March 31, 2012			December 31, 2011
Assets
Cash and cash equivalents	$	17,429,602		$	20,201,573
Restricted cash	12,746,866			13,852,753
Interest receivable	8,272,937			6,984,978
Tax-exempt mortgage revenue bonds held in trust, at fair value (Notes 4 & 8)	111,845,978			109,152,787
Tax-exempt mortgage revenue bonds, at fair value (Note 4)	26,730,200			26,542,565
Real estate assets: (Note 5)
Land	13,343,557			12,430,434
Buildings and improvements	112,843,888			111,653,203
Real estate assets before accumulated depreciation	126,187,445			124,083,637
Accumulated depreciation	(21,063,405		)	(19,817,998		)
Net real estate assets	105,124,040			104,265,639
Other assets (Note 6)	9,287,481			9,682,388
Assets of discontinued operations (Note 7)	7,287,162			7,293,862
Total Assets	$	298,724,266		$	297,976,545

Liabilities
Accounts payable, accrued expenses and other liabilities	$	3,058,530		$	3,491,642
Distribution payable	3,803,400			3,911,340
Debt financing (Note 8)	112,537,000			112,673,000
Mortgages payable (Note 9)	41,752,135			40,092,455
Liabilities of discontinued operations (Note 7)	6,166,328			6,219,063
Total Liabilities	167,317,393			166,387,500

Commitments and Contingencies (Note 13)

Partners' Capital
General Partner (Note 2)	(354,861		)	(354,006		)
Beneficial Unit Certificate holders	154,826,581			154,911,228
Unallocated deficit of Consolidated VIEs	(23,752,821		)	(23,512,962		)
Total Partners' Capital	130,718,899			131,044,260
Noncontrolling interest (Note 5)	687,974			544,785
Total Capital	131,406,873			131,589,045
Total Liabilities and Partners' Capital	$	298,724,266		$	297,976,545



	For the Three Months Ended,
	March 31, 2012			March 31, 2011
Revenues:
Property revenues	$	4,238,929		$	3,565,553
Mortgage revenue bond investment income	2,371,404			2,220,913
Other income	39,345			251,361
Total revenues	6,649,678			6,037,827
Expenses:
Real estate operating (exclusive of items shown below)	2,279,934			2,132,208
Provision for loss on receivables	238,175			—
Depreciation and amortization	1,438,905			1,133,059
Interest	1,318,535			773,734
General and administrative	650,579			641,595
Total expenses	5,926,128			4,680,596
Income from continuing operations	723,550			1,357,231
Income from discontinued operations	46,034			14,004
Net income	769,584			1,371,235
Net income attributable to noncontrolling interest	139,152			182,061
Net income - America First Tax Exempt Investors, L.P.	$	630,432		$	1,189,174

Net income (loss) allocated to:
General Partner	$	8,703		$	14,693
Limited Partners - Unitholders	861,588			1,454,610
Unallocated loss of Consolidated Property VIEs	(239,859		)	(280,129		)
Noncontrolling interest	139,152			182,061
	$	769,584		$	1,371,235
Unitholders' interest in net income per unit (basic and diluted):
Net income (loss), basic and diluted, per unit	$	0.03		$	0.05
Weighted average number of units outstanding, basic and diluted	30,122,928			30,122,928



	General Partner			# of Units	Beneficial Unit Certificate Holders			Unallocated Deficit of Consolidated VIEs			Non- controlling Interest			Total			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2012	$	(354,006	)	30,122,928	$	154,911,228		$	(23,512,962	)	$	544,785		$	131,589,045		$	95,894
Noncontrolling interest contribution	—				—			—			4,037			4,037
Distributions paid or accrued	(38,034		)	—	(3,765,366		)	—			—			(3,803,400		)	—
Net income (loss)	8,703			—	861,588			(239,859		)	139,152			769,584			—
Unrealized gain on securities	28,476			—	2,819,131			—			—			2,847,607			2,847,607
Balance at March 31, 2012	$	(354,861	)	30,122,928	$	154,826,581		$	(23,752,821	)	$	687,974		$	131,406,873		$	2,943,501

	General Partner			# of Units	Beneficial Unit Certificate Holders			Unallocated Deficit of Consolidated VIEs			Non- controlling Interest			Total			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2011	$	(280,629	)	30,122,928	$	161,389,189		$	(32,945,669	)	$	(141,326	)	$	128,021,565		$	(9,692,233	)
Distributions paid or accrued	(38,034		)		(3,765,366		)	—			—			(3,803,400		)
Net income (loss)	14,693			—	1,454,610			(280,129		)	182,061			1,371,235			—
Unrealized gain on securities	28,556			—	2,827,002			—			—			2,855,558			2,855,558
Balance at March 31, 2011	$	(275,414	)	30,122,928	$	161,905,435		$	(33,225,798	)	$	40,735		$	128,444,958		$	(6,836,675	)



	For Three Months Ended,
	March 31, 2012			March 31, 2011
Cash flows from operating activities:
Net income	$	769,584		$	1,371,235
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation and amortization expense	1,511,315			1,225,565
Provision for loss from receivables	238,175			—
Non-cash loss on derivatives	329,340			232,554
Bond discount amortization	(105,140		)	(116,858		)
Gain on asset sold	—			(21,103		)
Gain on early extinguishment of debt	—			(104,988		)
Changes in operating assets and liabilities, net of effect of acquisitions
Increase in interest receivable	(1,526,134		)	(1,223,846		)
Increase in other assets	13,550			(1,056,661		)
Decrease in accounts payable and accrued expenses	(449,445		)	(529,422		)
Net cash provided (used) by operating activities	781,245			(223,524		)
Cash flows from investing activities:
Capital expenditures	(1,823,562		)	(930,797		)
Acquisition of tax-exempt mortgage revenue bonds	—			(4,492,500		)
Acquisition of partnerships, net of cash acquired	—			(20,758,476		)
Proceeds from assets sold	—			36,500
Decrease (increase) in restricted cash	225,705			(125,259		)
Restricted cash - debt collateral released	650,833			732,403
Cash released upon foreclosure	—			2,047,161
Principal payments received on tax-exempt mortgage revenue bonds	71,317			101,349
Net cash used by investing activities	(875,707		)	(23,389,619		)
Cash flows from financing activities:
Distributions paid	(3,911,340		)	(3,803,399		)
(Decrease) increase in liabilities related to restricted cash	(225,705		)	125,259
Proceeds from debt financing	1,673,579			27,500,584
Deferred financing costs	(34,188		)	—
Principal payments on debt financing and mortgage payable	(186,302		)	(159,464		)
Sale of LP Interests - Ohio Properties	4,037			—
Net cash (used) provided by financing activities	(2,679,919		)	23,662,980
Net (decrease) increase in cash and cash equivalents	(2,774,381		)	49,837
Cash and cash equivalents at beginning of period, including cash and cash equivalents of discontinued operations of $11,840 and $18,928, respectively	20,213,413			13,277,048
Cash and cash equivalents at end of period, including cash and cash equivalents of discontinued operations of $9,431 and $17,601, respectively	$	17,439,032		$	13,326,885

Supplemental cash flow information:
Cash paid during the period for interest	881,291			816,171
Distributions declared but not paid	3,803,400			3,803,399
Capital expenditures financed through notes payable	42,929			9,601

America First Tax Exempt Investors, L.P. (the “Partnership”) was formed on April 2, 1998, under the Delaware Revised Uniform Limited Partnership Act for the primary purpose of acquiring, holding, selling and otherwise dealing with a portfolio of federally tax-exempt mortgage revenue bonds which have been issued to provide construction and/or permanent financing of multifamily residential properties. Interest on these bonds is excludable from gross income for federal income tax purposes. As a result, most of the income earned by the Partnership is exempt from federal income taxes. The Partnership may also invest in other types of tax-exempt securities that may or may not be secured by real estate and may make taxable mortgage loans secured by multifamily properties which are financed by tax-exempt mortgage revenue bonds held by the Partnership. The Partnership generally does not seek to acquire direct interests in real property as long term or permanent investments. The Partnership may, however, acquire real estate securing its tax-exempt mortgage revenue bonds or taxable mortgage loans through foreclosure in the event of a default. In addition, the Partnership may acquire interests in multifamily apartment properties (“MF Properties”) in order to position itself for future investments in tax-exempt mortgage revenue bonds issued to finance these properties. The Partnership expects to sell its interest in these MF Properties in connection with the future syndication of low income housing tax credits under Section 42 of the Internal Revenue Code ("LIHTCs") or to a tax-exempt organization and to acquire tax-exempt mortgage revenue bonds on these properties to provide debt financing to the new owners.

The condensed consolidated financial statements of the “Company” reported in this Form 10-Q include the assets, liabilities and results of operations of the Partnership, its Consolidated Subsidiaries and three other consolidated entities in which the Partnership does not hold an ownership interest but which own multifamily apartment properties financed with tax-exempt mortgage revenue bonds held by the Partnership and which are treated as variable interest entities ("VIEs") of which the Partnership has been determined to be the primary beneficiary (“Consolidated VIEs”). The Consolidated Subsidiaries of the Partnership consist of:

Stand alone financial information of the Partnership reported in this Form 10-Q includes only the assets, liabilities, and results of operations of the Partnership and its Consolidated Subsidiaries (hereafter the “Partnership”) without the Consolidated VIEs. In the Company’s consolidated financial statements, all transactions and accounts between the Partnership, the Consolidated Subsidiaries and the Consolidated VIEs have been eliminated in consolidation. The Partnership does not believe that the consolidation of VIEs for reporting under accounting principles generally accepted in the United States of America (“GAAP”) affects the Partnership’s status as a partnership for federal income tax purposes or the status of unitholders as partners of the Partnership, the treatment of the tax-exempt mortgage revenue bonds on the properties owned by Consolidated VIEs as debt, the tax-exempt nature of the interest payments received on bonds secured by the properties owned by Consolidated VIEs or the manner in which the Partnership’s income is reported to unitholders on IRS Form K-1.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accompanying interim unaudited condensed consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted according to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. These condensed consolidated financial statements and notes have been prepared consistently with the 2011 Form 10-K. In the opinion of management, all adjustments (consisting of normal and recurring accruals) necessary to present fairly the financial position as of March 31, 2012, and the results of operations for the interim periods presented have been made. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year.

The Agreement of Limited Partnership of the Partnership contains provisions for the distribution of Net Interest Income, Net Residual Proceeds and Liquidation Proceeds, for the allocation of income or loss from operations and for the allocation of income and loss arising from a repayment, sale, or liquidation of investments. Income and losses will be allocated to each unitholder on a periodic basis, as determined by the General Partner, based on the number of BUCs held by each unitholder as of the last day of the period for which such allocation is to be made. Distributions of Net Interest Income and Net Residual Proceeds will be made to each unitholder of record on the last day of each distribution period based on the number of BUCs held by each unitholder as of such date. For purposes of the Agreement of Limited Partnership, cash distributions, if any, received by the Partnership from its indirect interest in MF Properties (Note 5) will be included in the Partnership’s Interest Income and cash distributions received by the Partnership from the sale of such properties will be included in the Partnership Residual Proceeds.

Cash distributions are currently made on a quarterly basis but may be made on a monthly or semiannual basis at the election of AFCA 2. On each distribution date, Net Interest Income is distributed 99% to the unitholders and 1% to AFCA 2 and Net Residual Proceeds are distributed 100% to unitholders except that Net Interest Income and Net Residual Proceeds representing contingent interest in an amount equal to 0.9% per annum of the principal amount of the tax-exempt mortgage revenue bonds on a cumulative basis (defined as Net Interest Income (Tier 2) and Net Residual Proceeds (Tier 2), respectively) are distributed 75% to the unitholders and 25% to AFCA 2.

In June 2010, the Company completed a sales transaction whereby four of the MF Properties, Crescent Village, Post Woods (I and II), and Willow Bend apartments in Ohio (the “Ohio Properties”), were sold to three new ownership entities controlled by an unaffiliated not-for-profit entity. The Company acquired 100% of the $18.3 million tax-exempt mortgage revenue bonds issued by the Ohio Housing Finance Agency as part of a plan of financing for the acquisition and rehabilitation of the Ohio Properties. The tax-exempt mortgage revenue bonds secured by the Ohio Properties were acquired by the Company at par and consisted of two series. The Series A bond has a par value of $14.7 million and bears interest at an annual rate of 7.0%. The Series B bond has a par value of $3.6 million and bears interest at an annual interest rate of 10.0%. Both series of bonds mature in June 2050. The Company had previously acquired a 99% interest in the Ohio Properties as part of its strategy of acquiring existing multifamily apartment properties that it expects will be partially financed with new tax-exempt mortgage bonds at the time the properties become eligible for the issuance of additional LIHTCs. In addition to the new tax-exempt mortgage revenue bonds acquired by the Company, the plan of financing for the acquisition included other subordinated debt issued by the Company. At the time of acquisition, the new owners had not contributed any capital to the transaction and the Company effectively provided 100% of the capital structure to the new owners as part of the sale transaction. Pursuant to accounting guidance for property, plant, and equipment - real estate sales, the sale and restructure does not meet the criteria for derecognition of the properties or full accrual accounting for the gain. The guidance requires sufficient equity at risk as part of a sales transaction to indicate a commitment from the buyer (typically a minimum of 3 to 5% investment by the new owners). Under the sales agreement, the Ohio Properties were sold for a total purchase price of $16.2 million. Cash received by the selling limited partnerships as part of the sale transaction represents a gain on the sale transaction of approximately $1.8 million which has been deferred by the Company.

In October 2011, the three limited partnerships that own the Ohio Properties admitted two entities that are affiliates of Boston Capital (the “BC Partners”) as new limited partners as part of a syndication of LIHTCs on the Ohio Properties. The BC Partners have agreed to contribute approximately $6.7 million to the equity of these limited partnerships, subject to the Ohio Properties meeting certain debt service coverage ratios specified in the applicable limited partnership agreements. As of March 31, 2012, the Ohio Properties had not yet achieved these debt service coverage ratios and the BC Partners had not contributed a sufficient amount of additional capital to these limited partnerships to allow the Company to deconsolidate the Ohio Properties. Accordingly, the Company will continue to report each Ohio Property as an MF Property, and no gain from the 2010 sale of such Ohio Property will be recognized by the Company, until the Ohio Property achieves specified debt service coverage ratios and the BC Partners have contributed their additional capital to the limited partnership owning the Ohio Property. The Company expects that each of the Ohio Properties will achieve the debt service coverage ratios so that the BC Partners will fully fund their capital commitments during 2012. As that occurs, each Ohio Properties will cease to be reported as an MF Property and the Company will recognize the gain for the 2010 sale of the Ohio Property. After that time, the Company will report the tax-exempt mortgage revenue bonds on such Ohio Property as an asset and will report the related interest income on the bond.

In connection with the BC Partners transaction, the Company entered into guarantee agreements with the BC Partners under which the Company has guaranteed certain obligations of the general partner of these limited partnerships, including an obligation to repurchase the interests of the BC Partners if certain “repurchase events” occur. A repurchase event is defined as any one of a number of events mainly focused on the completion of the property rehabilitation, property rent stabilization, the delivery of LIHTCs, tax credit recapture and foreclosure. Even if a repurchase event should occur after the $7.8 million of equity has been contributed, 25% of the BC contributed capital would remain as equity in the Ohio Properties and thus BC, a third party, would have sufficient equity in the Ohio Properties for the Company to recognize the sale discussed above.

The Partnership invests in federally tax-exempt mortgage revenue bonds which have been issued to provide construction and/or permanent financing of multifamily residential apartments. The Partnership owns 100% of these bonds and each bond is secured by a first mortgage on the property. The Partnership has also made taxable loans to the property owners in certain cases which are secured by second mortgages on these properties. Although each multifamily property financed with tax-exempt mortgage revenue bonds held by the Partnership is owned by a separate entity in which the Partnership has no equity ownership interest, the debt financing provided by the Partnership creates a variable interest in these ownership entities that may require the Partnership to report the assets, liabilities, and results of operations of these entities on a consolidated basis under GAAP.

The Partnership determined it is the primary beneficiary of the following properties at March 31, 2012: Bent Tree, Fairmont Oaks, and Lake Forest. The capital structure of each of these VIEs consists of senior debt, subordinated debt, and equity capital. The senior debt is in the form of a tax-exempt multifamily housing mortgage revenue bond and accounts for the majority of each VIE's total capital. As the bondholder, the Partnership is entitled to principal and interest payments and has certain protective rights as established by the bond documents. The equity ownership of the consolidated VIEs; Bent Tree, Fairmont Oaks, and Lake Forest, is ultimately held by corporations which are owned by four individuals, two of which are related parties. Additionally, each of these properties is managed by an affiliate of the Partnership, America First Properties Management Company, LLC (“Properties Management”) which is an affiliate of Burlington.

In determining the primary beneficiary of these VIEs, the Partnership considered the activities of the VIE which most significantly impact the VIEs' economic performance, who has the power to control such activities, the risks which the entities were designed to create, the variability associated with those risks and the interests which absorb such variability. The Partnership also considered the related party relationship of the entities involved in the VIEs. It was determined that the Partnership, as part of the related party group, met both of the primary beneficiary criteria and was the most closely associated with the VIEs and; therefore, was determined to be the primary beneficiary.

The Company does not consolidate two VIE entities, Ashley Square and Cross Creek. In determining the primary beneficiary of these VIEs, the Partnership considered the activities of each VIE which most significantly impact the VIEs' economic performance, who has the power to control such activities, the risks which the entities were designed to create, the variability associated with those risks and the interests which absorb such variability. The significant activities of the VIE that impact the economic performance of the entity include leasing and maintaining apartments, determining if the property is to be sold, decisions relating to debt refinancing, the selection of or replacement of the property manager and the approval of the operating and capital budgets. As discussed below, while the capital structures of these VIEs resulted in the Partnership holding a majority of the variable interests in these VIEs, the Partnership determined it does not have the power to direct the activities of these VIEs that most significantly impact the VIEs’ economic performance and, as a result, is not the primary beneficiary of these VIEs.

Ashley Square – Ashley Square Housing Cooperative acquired the ownership of the Ashley Square Apartments in December 2008 from Ashley Square LLC through a warranty deed of transfer and an assumption of debt. This transfer of ownership constituted a reconsideration event as outlined in the consolidation guidance which triggered a re-evaluation of the holders of variable interests to determine the primary beneficiary of the VIE. The capital structure of the VIE consists of senior debt, subordinated loans and equity capital. The senior debt is in the form of tax-exempt mortgage revenue bonds that are 100% owned by the Partnership and account for the majority of the VIE’s total capital. As the bondholder, the Partnership is entitled to principal and interest payments and has certain protective rights as established by the bond documents. The VIE is organized as a housing cooperative and the 99% equity owner of this VIE is The Foundation for Affordable Housing (“FAH”), an unaffiliated Nebraska not-for-profit organization. Additionally, this property is managed by Properties Management.

Cross Creek – Cross Creek Apartments Holdings LLC is the owner of the Cross Creek Apartments. On January 1, 2010, Cross Creek Apartment Holdings LLC entered into a new operating agreement and admitted three new members. These new members committed approximately $2.2 million of capital payable in three installments including $563,000 on January 1, 2010. The new operating agreement and admission of new owner members constituted a reconsideration event as outlined in the consolidation guidance which triggered a re-evaluation of the holders of variable interests to determine the primary beneficiary of the VIE. The capital structure of the VIE consists of senior debt, subordinated loans, and equity capital at risk. The senior debt is in the form of tax-exempt mortgage revenue bonds that are 100% owned by the Partnership and account for the majority of the VIE’s total capital. As the bondholder, the Partnership is entitled to principal and interest payments and has certain protective rights as established by the bond documents. The three newly admitted members of this VIE are each unaffiliated with the Partnership and have contributed significant equity capital to the VIE. These members collectively control a 99% interest in the VIE. The other 1% member of this VIE is FAH, which is also unaffiliated with the Partnership. Additionally, this property is managed by Properties Management.

The tax exempt mortgage revenue bonds are classified on the balance sheet as available for sale investments and are carried at fair value while property loans are presented on the balance sheet as other assets and are carried at the unpaid principal and interest less any loan loss reserves. See Note 4 for additional information regarding the bonds and Note 6 for additional information regarding the property loans. The maximum exposure to loss for the bonds is equal to the unpaid principal balance as of March 31, 2012. The difference between the carrying value and the maximum exposure to loss is a function of the fair value of the bond. The maximum exposure to loss for the property loans is equal to the unpaid principal and interest. The difference between the carrying value and the maximum exposure is the value of loan loss reserves that have been previously recorded against the outstanding loan balances.



	Partnership as of March 31, 2012			Consolidated VIEs as of March 31, 2012			Consolidation -Elimination as of March 31, 2012			Total as of March 31, 2012
Assets
Cash and cash equivalents	$	17,390,835		$	38,767		$	—		$	17,429,602
Restricted cash	11,913,459			833,407			—			12,746,866
Interest receivable	12,985,895			—			(4,712,958		)	8,272,937
Tax-exempt mortgage revenue bonds held in trust, at fair value	135,825,458			—			(23,979,480		)	111,845,978
Tax-exempt mortgage revenue bonds, at fair value	26,730,200			—			—			26,730,200
Real estate assets:
Land	10,093,513			3,250,044			—			13,343,557
Buildings and improvements	81,180,224			31,663,664			—			112,843,888
Real estate assets before accumulated depreciation	91,273,737			34,913,708			—			126,187,445
Accumulated depreciation	(8,383,599		)	(12,679,806		)	—			(21,063,405		)
Net real estate assets	82,890,138			22,233,902			—			105,124,040
Other assets	19,045,160			846,826			(10,604,505		)	9,287,481
Assets of discontinued operations	7,287,162			—			—			7,287,162
Total Assets	$	314,068,307		$	23,952,902		$	(39,296,943	)	$	298,724,266

Liabilities
Accounts payable, accrued expenses and other liabilities	$	2,202,088		$	25,146,588		$	(24,290,146	)	$	3,058,530
Distribution payable	3,803,400			—			—			3,803,400
Debt financing	112,537,000			—			—			112,537,000
Mortgages payable	41,752,135			24,347,000			(24,347,000		)	41,752,135
Liabilities of discontinued operations	6,166,328			—			—			6,166,328
Total Liabilities	166,460,951			49,493,588			(48,637,146		)	167,317,393
Partners' Capital
General Partner	(354,861		)	—			—			(354,861		)
Beneficial Unit Certificate holders	147,274,243			—			7,552,338			154,826,581
Unallocated loss of Consolidated VIEs	—			(25,540,686		)	1,787,865			(23,752,821		)
Total Partners' Capital	146,919,382			(25,540,686		)	9,340,203			130,718,899
Noncontrolling interest	687,974			—			—			687,974
Total Capital	147,607,356			(25,540,686		)	9,340,203			131,406,873
Total Liabilities and Partners' Capital	$	314,068,307		$	23,952,902		$	(39,296,943	)	$	298,724,266



	Partnership as of December 31, 2011			Consolidated VIEs as of December 31, 2011			Consolidation -Elimination as of December 31, 2011			Total as of December 31, 2011
Assets
Cash and cash equivalents	$	20,188,855		$	12,718		$	—		$	20,201,573
Restricted cash	12,915,700			937,053			—			13,852,753
Interest receivable	11,395,266			—			(4,410,288		)	6,984,978
Tax-exempt mortgage revenue bonds held in trust, at fair value	132,920,723			—			(23,767,936		)	109,152,787
Tax-exempt mortgage revenue bonds, at fair value	26,542,565			—			—			26,542,565
Real estate assets:
Land	9,180,390			3,250,044			—			12,430,434
Buildings and improvements	80,045,210			31,607,993			—			111,653,203
Real estate assets before accumulated depreciation	89,225,600			34,858,037			—			124,083,637
Accumulated depreciation	(7,485,664		)	(12,332,334		)	—			(19,817,998		)
Net real estate assets	81,739,936			22,525,703			—			104,265,639
Other assets	19,693,928			839,879			(10,851,419		)	9,682,388
Assets of discontinued operations	7,293,862			—			—			7,293,862
Total Assets	$	312,690,835		$	24,315,353		$	(39,029,643	)	$	297,976,545

Liabilities
Accounts payable, accrued expenses and other liabilities	$	2,516,851		$	24,780,781		$	(23,805,990	)	$	3,491,642
Distribution payable	3,911,340			—			—			3,911,340
Debt financing	112,673,000			—			—			112,673,000
Mortgages payable	40,092,455			24,407,000			(24,407,000		)	40,092,455
Liabilities of discontinued operations	6,219,063			—			—			6,219,063
Total Liabilities	165,412,709			49,187,781			(48,212,990		)	166,387,500
Partners' Capital
General Partner	(354,006		)	—			—			(354,006		)
Beneficial Unit Certificate holders	147,087,347			—			7,823,881			154,911,228
Unallocated loss of Consolidated VIEs	—			(24,872,428		)	1,359,466			(23,512,962		)
Total Partners' Capital	146,733,341			(24,872,428		)	9,183,347			131,044,260
Noncontrolling interest	544,785			—			—			544,785
Total Capital	147,278,126			(24,872,428		)	9,183,347			131,589,045
Total Liabilities and Partners' Capital	$	312,690,835		$	24,315,353		$	(39,029,643	)	$	297,976,545



	Partnership For the Three Months Ended March 31, 2012		Consolidated VIEs For the Three Months Ended March 31, 2012			Consolidation -Elimination For the Three Months Ended March 31, 2012			Total For the Three Months Ended March 31, 2012
Revenues:
Property revenues	$	3,044,020	$	1,194,909		$	—		$	4,238,929
Mortgage revenue bond investment income	2,753,077		—			(381,673		)	2,371,404
Other income	39,345		—			—			39,345
Total revenues	5,836,442		1,194,909			(381,673		)	6,649,678
Expenses:
Real estate operating (exclusive of items shown below)	1,571,893		708,041			—			2,279,934
Provision for loss on receivables	238,175		—			—			238,175
Depreciation and amortization	1,093,851		355,986			(10,932		)	1,438,905
Interest	1,318,535		799,142			(799,142		)	1,318,535
General and administrative	650,579		—			—			650,579
Total expenses	4,873,033		1,863,169			(810,074		)	5,926,128
Income (loss) from operations	963,409		(668,260		)	428,401			723,550
Income from discontinued operations	46,034		—			—			46,034
Net income (loss)	1,009,443		(668,260		)	428,401			769,584
Net income attributable to noncontrolling interest	139,152		—			—			139,152
Net income (loss) - America First Tax Exempt Investors, L. P.	$	870,291	$	(668,260	)	$	428,401		$	630,432



	Partnership For the Three Months Ended March 31, 2011		Consolidated VIEs For the Three Months Ended March 31, 2011		Consolidation -Elimination For the Three Months Ended March 31, 2011			Total For the Three Months Ended March 31, 2011
Revenues:
Property revenues	$	1,679,315	$	1,886,238	$	—		$	3,565,553
Mortgage revenue bond investment income	2,904,674		—		(683,761		)	2,220,913
Other income	146,373		3,416,838		(3,311,850		)	251,361
Total revenues	4,730,362		5,303,076		(3,995,611		)	6,037,827
Expenses:
Real estate operating (exclusive of items shown below)	1,076,084		1,056,124		—			2,132,208
Depreciation and amortization	601,589		544,726		(13,256		)	1,133,059
Interest	773,734		1,324,298		(1,324,298		)	773,734
General and administrative	641,595		—		—			641,595
Total expenses	3,093,002		2,925,148		(1,337,554		)	4,680,596
Income (loss) from operations	1,637,360		2,377,928		(2,658,057		)	1,357,231
Income from discontinued operations	14,004		—		—			14,004
Net income (loss)	1,651,364		2,377,928		(2,658,057		)	1,371,235
Net income attributable to noncontrolling interest	182,061		—		—			182,061
Net income (loss) - America First Tax Exempt Investors, L. P.	1,469,303		2,377,928		(2,658,057		)	1,189,174

The tax-exempt mortgage revenue bonds owned by the Company have been issued to provide construction and/or permanent financing of multifamily residential properties and do not include the tax-exempt mortgage revenue bonds issued with respect to properties owned by Consolidated VIEs or the Ohio Properties presented as MF Properties (Note 2 and Note 5). Tax-exempt mortgage revenue bonds are either held directly by the Company or are held in trusts created in connection with debt financing transactions (Note 8). The Company had the following investments in tax-exempt mortgage revenue bonds as of dates shown:



	March 31, 2012
Description of Tax-Exempt Mortgage Revenue Bonds	Cost adjusted for pay-downs		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Ashley Square ⁽¹⁾	$	5,296,000	$	68,748	$	—		$	5,364,748
Autumn Pines ⁽²⁾	12,291,103		100,747		—			12,391,850
Bella Vista ⁽¹⁾	6,650,000		—		(273,581		)	6,376,419
Bridle Ridge ⁽¹⁾	7,790,000		—		(316,741		)	7,473,259
Brookstone ⁽¹⁾	7,442,216		1,252,431		—			8,694,647
Cross Creek ⁽¹⁾	5,972,672		1,932,363		—			7,905,035
GMF-Madison Tower⁽²⁾	3,810,000		103,403		—			3,913,403
GMF-Warren/Tulane ⁽²⁾	11,815,000		320,659		—			12,135,659
Lost Creek ⁽¹⁾	16,081,625		2,925,275		—			19,006,900
Runnymede ⁽¹⁾	10,685,000		—		—			10,685,000
Southpark ⁽¹⁾	11,945,354		1,701,846		—			13,647,200
Woodlynn Village ⁽¹⁾	4,492,000		—		(240,142		)	4,251,858
Tax-exempt mortgage revenue bonds held in trust	$	104,270,970	$	8,405,472	$	(830,464	)	$	111,845,978

	March 31, 2012
Description of Tax-Exempt Mortgage Revenue Bonds	Cost adjusted for pay-downs		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Iona Lakes	$	15,720,000	161,602		—			$	15,881,602
Woodland Park	15,662,000		—		(4,813,402		)	10,848,598
Tax-exempt mortgage revenue bonds	$	31,382,000	$	161,602	$	(4,813,402	)	$	26,730,200



	December 31, 2011
Description of Tax-Exempt Mortgage Revenue Bonds	Cost adjusted for pay-downs		Unrealized Gains		Unrealized Loss			Estimated Fair Value
Ashley Square ⁽¹⁾	$	5,308,000	$	—	$	—		$	5,308,000
Autumn Pines ⁽¹⁾	12,280,776		—		(152,094		)	12,128,682
Bella Vista ⁽¹⁾	6,650,000		—		(405,184		)	6,244,816
Bridle Ridge ⁽¹⁾	7,815,000		—		(469,056		)	7,345,944
Brookstone ⁽¹⁾	7,437,947		1,116,538		—			8,554,485
Cross Creek ⁽¹⁾	5,961,478		1,824,167		—			7,785,645
GMF-Madison Tower⁽²⁾	3,810,000		51,130		—			3,861,130
GMF-Warren/Tulane ⁽²⁾	11,815,000		321,722		—			12,136,722
Lost Creek ⁽¹⁾	16,051,048		1,962,587		—			18,013,635
Runnymede ⁽¹⁾	10,685,000		—		(434,452		)	10,250,548
Southpark ⁽¹⁾	11,925,483		1,431,637		—			13,357,120
Woodlynn Village ⁽¹⁾	4,492,000		—		(325,940		)	4,166,060
Tax-exempt mortgage revenue bonds held in trust	$	104,231,732	$	6,707,781	$	(1,786,726	)	$	109,152,787

	December 31, 2011
Description of Tax-Exempt Mortgage Revenue Bonds	Cost adjusted for pay-downs		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Iona Lakes	$	15,720,000	$	160,658	$	—		$	15,880,658
Woodland Park	15,662,000		—		(5,000,093		)	10,661,907
Tax-exempt mortgage revenue bonds	$	31,382,000	$	160,658	$	(5,000,093	)	$	26,542,565

Valuation - As all of the Company’s investments in tax-exempt mortgage revenue bonds are classified as available-for-sale securities, they are carried on the balance sheet at their estimated fair values. Due to the limited market for the tax-exempt mortgage revenue bonds, these estimates of fair value do not necessarily represent what the Company would actually receive in a sale of the bonds. There is no active trading market for the bonds and price quotes for the bonds are not generally available. As of March 31, 2012, all of the Company’s tax-exempt mortgage revenue bonds were valued using discounted cash flow and yield to maturity analyses performed by management. Management’s valuation encompasses judgment in its application. The key assumption in management’s yield to maturity analysis is the range of effective yields on the individual bonds. The effective yield analysis for each bond considers the current market yield on similar bonds as well as the debt service coverage ratio of each underlying property serving as collateral for the bond. At March 31, 2012, the range of effective yields on the individual bonds was 6.0% to 8.9%. At December 31, 2011, the range of effective yields on the individual bonds was 6.3% to 9.0%. Additionally, the Company calculated the sensitivity of the key assumption used in calculating the fair values of these bonds. Assuming a 10 percent adverse change in the key assumption, the effective yields on the individual bonds would increase to a range of 6.6% to 9.7% and would result in additional unrealized losses on the bond portfolio of approximately $9.2 million. This sensitivity analysis is hypothetical and is as of a specific point in time. The results of the sensitivity analysis may not be indicative of actual changes in fair value and should be used with caution. If available, the general partner may also consider price quotes on similar bonds or other information from external sources, such as pricing services. Pricing services, broker quotes and management’s analyses provide indicative pricing only.

Unrealized gains or losses on these tax-exempt mortgage revenue bonds are recorded in accumulated other comprehensive income (loss) to reflect changes in their estimated fair values resulting from market conditions and fluctuations in the present value of the expected cash flows from the underlying properties. As of March 31, 2012, the following bond investments have been in an unrealized loss position for greater than twelve months; Bella Vista, Bridle Ridge, Woodlynn Village, and Woodland Park. The Company has reviewed each of its mortgage revenue bonds for impairment. Based upon this evaluation, the current unrealized losses on the bonds are considered to be temporary. Valuations of the bonds in an unrealized loss position have improved during the first three months of 2012. If the credit and capital markets would deteriorate, the Company experiences deterioration in the values of its investment portfolio, or if the Company’s intent and ability to hold certain bonds changes, the Company may incur impairments to its investment portfolio which could negatively impact the Company’s financial condition, cash flows, and reported earnings.

In February 2011, the Partnership acquired the tax-exempt mortgage revenue bond for a 100 unit multifamily apartment complex located in Montclair, California known as Briarwood Manor Apartments for approximately $4.5 million which represented 100% of the bond issuance. The bond's approximate outstanding par value is $5.5 million and earns interest at an annual rate of 5.3% with a monthly interest and principal payment and stated maturity date of June 1, 2038. Based on the purchase price discount, the bond's yield was approximately 7.0% to the Partnership. In October 2011, the Briarwood Manor bond was called and retired at par plus accrued interest for approximately $4.9 million and a gain of approximately $445,000 was recorded.

The Partnership previously identified the Woodland Park tax-exempt mortgage revenue bond for which certain actions may be necessary to protect the Partnership’s position as a secured bondholder and lender. The Company evaluated the Woodland Park bond holding for an other-than-temporary decline in value as of December 31, 2011 (see Form 10-K, Footnote 5 for discussion of our impairment testing method which remains the same). Based on this evaluation, the Company has concluded that no other-than-temporary impairment of the Woodland Park bond existed at December 31, 2011. However, the evaluation determined that the interest receivable accrued on the Woodland Park bond was impaired and an approximate $953,000 allowance for loss on receivables was recorded during fiscal year 2011. The Partnership has recorded an additional allowance for loss on receivables of approximately $238,000 against the interest receivable in the first quarter of 2012 which represents the accrued interest income on the bond for the first quarter of 2012. The Partnership continues to monitor these investments for changes in circumstances that might warrant an impairment charge. As of December 31, 2011, the property had 215 units leased out of total available units of 236, or 91% physical occupancy. As of March 31, 2012, occupancy had decreased to 205 units leased, or 87% physical occupancy and we believe this is a temporary decline and occupancy will be at or higher than 90% by December 31, 2012 which will increase the property's net operating income to be in line with what had been projected for 2012 in the most recent evaluation for other than temporary impairment.

To facilitate its investment strategy of acquiring additional tax-exempt mortgage revenue bonds secured by MF Properties, the Company has acquired through its various subsidiaries 99% limited partner positions in five limited partnerships and 100% member positions in four limited liability companies that own the MF Properties. The financial statements of these properties are consolidated with those of the Company. The general partners of these partnerships are unaffiliated parties and their 1% ownership interest in these limited partnerships is reflected in the Company’s consolidated financial statements as noncontrolling interests. The Company expects each of these MF Properties to eventually be sold either to a not-for-profit entity or in connection with a syndication of LIHTCs. The Company expects to purchase tax-exempt mortgage revenue bonds issued by the new property owners as part of the restructuring.

In July 2011, the Company obtained a $6.5 million construction loan secured by the DeCordova and Weatherford properties. This construction loan will be used to fund the completion of Weatherford and the planned future expansion of DeCordova. The construction loan is with an unrelated third party and carries a fixed annual interest rate of 5.9%, maturing on July 28, 2015. The balance of this note at March 31, 2012 is $6.3 million. This agreement requires $500,000 to be held by the Company as restricted cash.

In the third quarter of 2010, the Company purchased a minority interest equal to 8.7% ownership in 810 Schutte Road LLC ("Eagle Village"), a 511 bed student housing facility located in Evansville, Indiana. The minority interest investment totaled approximately $1.1 million and was presented in other assets. In June 2011, the Partnership acquired the remaining ownership interest in Eagle Village. Approximately $3.1 million of cash on hand plus a conventional mortgage of approximately $8.9 million was used to purchase the remaining ownership. The mortgage loan carries a variable interest rate of one-month LIBOR plus 2.75% but will not be less than 3.5%. On March 31, 2012 this rate was 3.5%. This mortgage matures on June 1, 2013. Eagle Village returned $125,000 to the Company as a preferred return on their investment . The transaction is eliminated upon consolidation. Eagle Village is wholly owned by a subsidiary of the Partnership and was reported as an MF Property. The Partnership plans to operate the property as a student housing facility. Once stabilized as a student housing property, the Company will seek to restructure the ownership and capital structure through the sale of the property to a student housing not-for-profit entity. The Company anticipates it will purchase tax-exempt mortgage revenue bonds issued as part of the restructuring.

In March 2011, the Partnership purchased The Arboretum on Farnam Drive ("Arboretum"), a 145 unit independent senior living facility located in Omaha, Nebraska, for approximately $20.0 million plus transaction expenses of approximately $449,000. The purchase price was funded through a conventional mortgage of $17.5 million and cash on hand. The mortgage payable is with Omaha State Bank, carries a 5.25% fixed rate and matures on March 31, 2014. The Partnership intends to restructure the property operations by shifting from an entrance fee rental income model utilized by the prior ownership to a current market rent model. Upon lease-up and stabilization of the property, projected to occur within the next 12 months, the Partnership expects to sell the property to a 501(c)3 not-for-profit entity and acquire tax-exempt mortgage revenue bonds collateralized by the property.



	Eagle Village 6/29/2011 (Date of acquisition)
Cash and cash equivalents	$	244,923
Restricted cash	589,493
Other current assets	46,380
In-place lease assets	96,829
Real estate assets	12,383,605
Finance costs	108,060
Total assets	$	13,469,290
Accounts payable, accrued expenses and other	$	278,230
Mortgage payable	8,925,000
Stockholders' equity	4,266,060
Total liabilities and stockholders' equity	$	13,469,290

	Arboretum 3/31/2011 (Date of acquisition)
Cash and cash equivalents	$	186,575
Restricted cash	429,231
Other current assets	116,631
Real estate assets	20,031,050
Finance costs	181,565
Total assets	$	20,945,052
Mortgage payable	$	17,500,000
Stockholders' equity	3,445,052
Total liabilities and stockholders' equity	$	20,945,052



MF Properties
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at March 31, 2012
Arboretum	Omaha, NE	145	$	1,720,740	$	18,737,356	$	20,458,096
Eagle Ridge	Erlanger, KY	64	290,763		2,487,654		2,778,417
Eagle Village	Evansville, IN	511	564,726		12,237,122		12,801,848
Meadowview	Highland Heights, KY	118	688,539		5,098,610		5,787,149
Glynn Place	Brunswick, GA	128	743,996		4,682,385		5,426,381
Greens of Pine Glen	Durham, NC	168	604,497		6,408,488		7,012,985
Residences of DeCordova	Granbury, TX	76	678,852		5,286,063		5,964,915
Residences of Weatherford	Weatherford, TX	76	533,000		6,758,697		7,291,697
							67,521,488
Less accumulated depreciation (depreciation expense of approximately $660,000 in 2012)							(5,187,105		)
Balance at March 31, 2012							$	62,334,383
MF Properties Subject to Sales Agreement
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at March 31, 2012
Crescent Village	Cincinnati, OH	90	$	353,117	$	6,238,824	$	6,591,941
Willow Bend	Hilliard, OH	92	580,130		5,019,621		5,599,751
Postwoods	Reynoldsburg, OH	180	1,148,504		10,412,053		11,560,557
							23,752,249
Less accumulated depreciation (depreciation expense of approximately $238,000 in 2012)							(3,196,494		)
Balance at March 31, 2012							$	20,555,755



MF Properties
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at December 31, 2011
Arboretum	Omaha, NE	145	$	1,720,740	$	18,730,388	$	20,451,128
Eagle Ridge	Erlanger, KY	64	290,763		2,485,433		2,776,196
Eagle Village	Evansville, IN	511	564,726		12,230,322		12,795,048
Meadowview	Highland Heights, KY	118	688,539		5,082,090		5,770,629
Glynn Place	Brunswick, GA	128	743,996		4,677,793		5,421,789
Greens of Pine Glen	Durham, NC	168	1,744,761		5,256,692		7,001,453
Residences of DeCordova	Granbury, TX	76	679,495		4,960,461		5,639,956
Residences of Weatherford	Weatherford, TX	76	533,000		5,105,278		5,638,278
							65,494,477
Less accumulated depreciation (depreciation expense of approximately $2.3 million in 2011)							(4,527,400		)
Balance at December 31, 2011							$	60,967,077
MF Properties Subject to Sales Agreement
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at December 31, 2011
Crescent Village	Cincinnati, OH	90	$	353,117	$	6,238,827	$	6,591,944
Willow Bend	Hilliard, OH	92	580,130		5,008,793		5,588,923
Postwoods	Reynoldsburg, OH	180	1,148,504		10,401,752		11,550,256
							23,731,123
Less accumulated depreciation (depreciation expense of approximately $829,000 in 2011)							(2,958,263		)
Balance at December 31, 2011							$	20,772,860

In June 2010, the Company completed a sales transaction whereby four of the MF Properties were sold to three new ownership entities controlled by an unaffiliated not-for-profit entity. As the buyer has no equity capital in this transaction and the property operations are the current support for the debt service, the Company, in substance, remains the owner for accounting purposes. As such, the Company will continue to consolidate the Ohio Properties as if the sale was not completed. The properties will continue to be presented as MF Properties and no gain will be recognized until such time as the transaction meets the criteria for derecognition of the properties and gain recognition can be accounted for as a sale (Note 2).

In addition to the MF Properties, the Company consolidates the assets, liabilities and results of operations of the Consolidated VIEs in accordance with the accounting guidance on consolidations. Although the assets of these VIEs are consolidated, the Company has no ownership interest in the VIEs other than to the extent they serve as collateral for the tax-exempt mortgage revenue bonds owned by the Partnership. The results of operations of those properties are recorded by the Company in consolidation but any net income or loss from these properties does not accrue to the unitholders or the general partner, but is instead included in "Unallocated deficit of Consolidated VIEs.”



Consolidated VIEs
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at March 31, 2012
Bent Tree Apartments	Columbia, SC	232	$	986,000	$	11,780,563	$	12,766,563
Fairmont Oaks Apartments	Gainsville, FL	178	850,400		8,628,046		9,478,446
Lake Forest Apartments	Daytona Beach, FL	240	1,396,800		11,271,899		12,668,699
							34,913,708
Less accumulated depreciation (depreciation expense of approximately $347,000 in 2012)							(12,679,806		)
							$	22,233,902
Consolidated VIEs
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at December 31, 2011
Bent Tree Apartments	Columbia, SC	232	$	986,000	$	11,758,519	$	12,744,519
Fairmont Oaks Apartments	Gainsville, FL	178	850,400		8,615,014		9,465,414
Lake Forest Apartments	Daytona Beach, FL	240	1,396,800		11,251,304		12,648,104
							34,858,037
Less accumulated depreciation (depreciation expense of approximately $1.7 million in 2011)							(12,332,334		)
Balance at December 31, 2011							$	22,525,703

In addition to the tax-exempt mortgage revenue bonds held by the Company, taxable property loans have been made to the owners of the properties which secure the bonds and are reported as Other Assets, net of loan loss reserves. The Company periodically, or as changes in circumstances or operations dictate, evaluates such taxable loans for impairment. The value of the underlying property assets is ultimately the most relevant measure of value to support the taxable loan values. The Company utilizes a discounted cash flow model in estimating a property fair value. Discounted cash flow models containing varying assumptions are considered. The various models may assume multiple revenue and expense scenarios, various capitalization rates and multiple discount rates. Other information, such as independent appraisals, may be considered in estimating a property fair value. If the estimated fair value of the property after deducting the amortized cost basis of any senior tax-exempt mortgage revenue bond exceeds the principal balance of the property loan then no potential loss is indicated and no allowance for property loans is needed. In estimating the property valuation, the most significant assumptions utilized in the discounted cash flow model remained the same as discussed in the Form 10-K and include revenue and expense projections and capitalization rates.



	March 31, 2012
	Outstanding Balance		Accrued Interest		Loan Loss Reserves			Net Taxable Loans
Ashley Square	$	4,786,342	$	1,398,866	$	(4,995,208	)	$	1,190,000
Cross Creek	6,869,227		1,424,053		(4,628,525		)	3,664,755
Iona Lakes	7,404,118		2,363,135		(6,364,757		)	3,402,496
Woodland Park	914,116		199,746		(1,113,862		)	—
	$	19,973,803	$	5,385,800	$	(17,102,352	)	$	8,257,251

	December 31, 2011
	Outstanding Balance		Accrued Interest		Loan Loss Reserves			Net Taxable Loans
Ashley Square	$	4,786,342	$	1,331,186	$	(4,927,528	)	$	1,190,000
Cross Creek	6,769,227		1,360,270		(4,564,742		)	3,564,755
Iona Lakes	7,339,118		2,207,301		(6,208,923		)	3,337,496
Woodland Park	914,116		167,609		(1,081,725		)	—
	$	19,808,803	$	5,066,366	$	(16,782,918	)	$	8,092,251



Delaware	47-0810385
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1004 Farnam Street, Suite 400	Omaha, Nebraska 68102
(Address of principal executive offices)	(Zip Code)
(402) 444-1630
(Registrant's telephone number, including area code)



Large accelerated filer £	Accelerated filer Q	Non- accelerated filer £	Smaller reporting company £
		(do not check if a smaller reporting company)



	For the three months ended March 31, 2011		For the year ended December 31, 2011

Revenues	$	6,923,484	$	28,841,546
Net income	1,309,234		(2,162,401		)
Net income allocated to unitholders	1,574,670		(1,025,221		)
Unitholders' interest in net income (loss) per unit (basic and diluted)	$	0.05	$	(0.03	)



	March 31, 2012			December 31, 2011
Property loans receivable	$	19,973,803		$	19,808,803
Less: Loan loss reserves	(17,102,352		)	(16,782,918		)
Deferred financing costs - net	3,763,626			3,894,071
Fair value of derivative contracts	993,930			1,323,270
Taxable bonds at fair market value	780,634			774,946
Other assets	877,840			664,216
Total Other Assets	$	9,287,481		$	9,682,388



	March 31, 2012		December 31, 2011
Balance, beginning of period	$	16,782,918	$	9,899,719
Provision for loan loss	—		4,242,571
Deconsolidation of VIEs	—		1,861,051
Accrued interest not recognized	319,434		779,5


•	defaults on the mortgage loans securing our tax-exempt mortgage revenue bonds;


•	risks associated with investing in multifamily apartments, including changes in business conditions and the general economy;


•	current negative economic and credit market conditions; and


•	changes in government regulations affecting our business.



	Three Months Ended March 31,
	2012		2011

Net income	$	769,584	$	1,371,235
Unrealized gain on securities	2,847,607		2,855,558
Comprehensive income	3,617,191		4,226,793
Comprehensive income attributable to noncontrolling interest	139,152		182,061
Comprehensive income - America First Tax Exempt Investors, L.P.	$	3,478,039	$	4,044,732


•	ATAX TEBS I, LLC, a special purpose entity owned and controlled by the Partnership, created to facilitate the Tax Exempt Bond Securitization (“TEBS”) Financing with Freddie Mac (Note 8).


•	Nine multifamily apartments ("MF Properties") owned by various Partnership subsidiaries. Such subsidiaries hold a 99% limited partner interest in five limited partnerships and 100% member positions in four limited liability companies. Three apartment properties which are subject to a sales agreement and are also reported as MF Properties (Note 5).


•	One of the five limited Partnerships which owns an MF Property is reported as a discontinued operation in both periods (Note 7).



	Balance Sheet Classification	Carrying Value		Maximum Exposure to Loss
Ashley Square Apartments
Tax Exempt Mortgage Revenue Bond	Bond Investment	$	5,364,748	$	5,296,000
Property Loan	Other Asset	1,190,000		4,786,342
		$	6,554,748	$	10,082,342
Cross Creek Apartments
Tax Exempt Mortgage Revenue Bond	Bond Investment	$	7,905,035	$	5,972,672
Property Loans	Other Asset	3,664,755		3,664,755
		$	11,569,790	$	9,637,427